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These Top Ten Homebuyer Mistakes are borrowed from MSN Real Estate/Smart Money, with my personal interpretations.
1) Not knowing how much you can afford.
No need spending time looking at homes you can not afford or missing out on homes you can afford. The first stop I recommend for all my buyers, is to speak with an experienced, professional Lender. There are excellent Mortgage Lenders and Brokers, both. Ask your friends for their recommendations or call me for mine. You can also check out lenders at www.betsyweyer.com
2) Assuming foreclosures and/or Short Sales are great deals.
Using a prior loan amount as any indicator of current value is mis-guided. Very often, these homes are in extremely poor condition. Short sales may be virtually impossible to negotiate on; because not only does the seller have to accept your terms, so does the dispassionate and overworked pre-foreclosure department employee, who may never even have seen the house.
3) Letting your true feelings show.
No matter how much you love the house, try to save your comments until you are outside the house and away from the listing agent or seller.
4) Failing to find a good Buyer's Agent.
Real Estate Agency laws vary greatly by state. Washington State has changed the law many times, since I entered the business in 1992. The current law makes the most sense to me and is the most beneficial to the majority of buyers. Be sure you understand how the agent likes to work and be sure to have a discussion about Dual Agency. Dual Agency is legal, but I will not participate as a Dual Agent because I feel it robs my clients of the highest quality representation. Remember that the listing agent has a contractual duty to their seller.
5) Underestimating the costs of homeownership.
Remember that homes can be expensive to operate and maintain. Be sure you have an experienced inspector check the house out before you close on the purchase. The purpose of the inspection is not to renegotiate the price or gouge the seller for repairs, but to be sure you are aware of the current condition of the home. You can often negotiate repairs during the purchase process. Maintenance items are generally not part of this negotiation process.
6) Failing to budget for taxes.
Unless you make a significant down payment, most lenders will collect monthly and pay the taxes for you. This protects them from a tax foreclosure.
7) Assuming your first offer will be accepted.
Even in a Buyer's Market, rarely will a first offer be accepted. Talk with your agent about negotiation tactics, which may vary depending on the seller. If you are negotiating on a foreclosure, you may be able to craft your offer to be readily accepted.
8) Skipping the home inspection.
If you have a buyer's agent you can trust, you should be able to trust their inspector recommendations. If a buyer has an inspector they want to use, that's great. if they don't, they usually ask me to make an appointment with my first available inspector. Knock on wood, but I don't think I have ever had a problem after closing that was caused by inspector error. I recommend inspectors who have years of experience and disclose everything to the buyer, while explaining how serious a defect is likely to be.
9) Doing too much too fast.
Not every dollar spent on improvements will translate to increased value. Be aware of what improvements you are making for your own enjoyment and which are for increased resale value.
10) Failing to include contingencies in the offer.
Home sale contingencies are obvious, but some others are easily missed. Don't forget to disclose any contingent source of funds; even from a home sale that is nearly closed or stocks that have not yet been sold. Undisclosed or hidden contingencies may create problems for you in your transaction.
Knowledge is key. Be sure to hire an agent who is willing to eductae you on conditions and practices in the local Real Estate Market!
April 16, 2009
